Added Ms Chew: "I think we should focus more on Q4 and next year. It's very clear that the trajectory is upwards. (What happened in September) is all water under the bridge. In my view, we shouldn't be rejoicing at low inflation - this is the last below-2 per cent inflation print we'll see in a long time."

Said UOB economist Francis Tan in a research note: "We reiterate that higher labour costs from the increase in foreign worker levies and the tight labour market environment pose risks to inflation (especially core inflation) in the coming months.

"This will likely impact the costs to the services industry more as they tend to have higher labour input content."

"Maybe some people saw an increase in services costs in August and extrapolated from there," said Ms Chew, when asked what forecasters could have missed in their higher inflation projection.

Services inflation, however, was stable in September at 2.7 per cent, as the stronger pick-up in the cost of recreation & entertainment and holiday travel was offset by lower contributions from education and household services fees.

Accommodation costs, meanwhile, went up by 3.9 per cent, slightly lower than the 4.2 per cent rise in August. The Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said this largely reflected a smaller increase in market rentals for both private and HDB properties.

MAS core inflation - which excludes costs of accommodation and private road transport - slowed slightly to 1.7 per cent in September, from 1.8 per cent in August.

The government again said that overall imported inflation is expected to remain subdued, given spare production capacity in the advanced economies, and ample supply buffers in the commodity markets.

"However, the pass- through of domestic costs to prices of consumer services could intensify as a result of the rising cost pressures that firms are facing from business rentals, COE premiums for commercial vehicles, and labour costs," said MAS and MTI in their statement.

Taking these factors into account, MAS core inflation is expected to rise "over the next few quarters", and average 1.5-2 per cent in 2013, and 2-3 per cent in 2014.

The government also reiterated that headline inflation is projected to come in at 2.5-3 per cent in 2013, and 2-3 per cent in 2014.